updated 01:35 am EST, Mon January 29, 2007

iPhone rejected by Verizon

Apple's "rich financial terms" and other demands were the primary reasons that Verizon Wireless, the No. 2 cellphone carrier in the US, passed on the chance to be the exclusive distributor of the iPhone almost two years ago. The USA Today on Monday reported that Apple wanted a percentage of the monthly cellphone fees as well as a say over how and where iPhones could be sold. The Cupertino-based company, who eventually announced an exclusive agreement with Cingular, demanded control of the relationship with iPhone customers, according to Jim Gerace, a Verizon Wireless vice president. "We said no. We have nothing bad to say about the Apple iPhone. We just couldn't reach a deal that was mutually beneficial." According to the report, collapse in the talks with Verizon led directly to Apple's deal with Cingular, which is reportedly a five-year exclusive agreement for US distribution.

Apple CEO Steve Jobs insisted that he have hard control over iPhone distribution as well as sole discretion on warranty and replacement issues. The discretion may have put other Verizon distribution partners such as Wal-Mart and Best Buy at a disadvantage, Verizon's exec claimed. "That would have put our own distribution partners at a disadvantage" to Apple and Verizon stores, Gerace said.

Responding to the customer support portion of the report, Cingular reiterated that it would take responsibility for any wireless support. Mark Siegel, a Cingular spokesman said Cingular would field calls related to the wireless service. "I don't want to leave the impression that these (iPhone) customers are not ours. They are."